Wednesday, April 11, 2007

The U.S. doesn't mind the lottery, but when it comes to sports betting
across interstate or international boundaries, all bets are off. They
shouldn't be. ANTIGUA AND BARBUDA, former British colonies on the eastern
edge of the Caribbean Sea, are smaller than Los Angeles and less populous
than Burbank. Yet they may be able to force the world's most powerful
government to change its gambling laws. Not since 1960 has it been legal
under federal law to place or take bets on sports using interstate or
international phone lines. The Federal Wire Act of 1961 and subsequent
measures also have been interpreted to ban online gambling as well, or at
least gambling on sports. At issue is whether those laws constitute
"arbitrary and unjustifiable discrimination" against foreign firms. Do they?
Antigua and Barbuda argue that they do - and the World Trade Organization
agrees. So do we. Realistically, the ban has had little effect. It hasn't
stopped Americans from betting (and losing) millions of dollars at online
casinos and bookmaking operations based in other countries. Nevertheless,
U.S. policy has irritated many of its trading partners, including Antigua
and Barbuda, which asked the WTO in 2003 to rule that U.S. gambling
restrictions violated an international treaty governing trade in services.
Eventually, in 2005, a WTO appeals panel accepted the U.S. argument that its
gambling restrictions were needed to protect public order and morals. But by
permitting off-track betting parlors in the U.S., the WTO ruled, Congress
created an exception to the ban on remote gambling that discriminated
against foreign bookmakers. After two more years of wrangling over what the
panel's order meant, a WTO tribunal ruled late last month that the U.S.
remained out of compliance. So the U.S. faces trade sanctions from the WTO
unless Congress does one of two things: Either acknowledge that betting on
horses from overseas is no greater threat to the nation's moral fiber than
it is at an OTB parlor, or make OTB parlors illegal. Maybe it doesn't have
the stomach for either. If so, then Antigua and Barbuda may want to ask the
WTO to ponder why allowing the interstate sale of lottery tickets - a form
of state-sponsored gambling - is any less hypocritical than the U.S. stance
on thoroughbreds and trotters.